You choose, we deliver
If you are interested in this story, you might be interested in others from The Journal Gazette. Go to www.journalgazette.net/newsletter and pick the subjects you care most about. We'll deliver your customized daily news report at 3 a.m. Fort Wayne time, right to your email.

Business

  • Review: Larger iPhones eliminate reason to switch
     NEW YORK – It’s easy to dismiss Apple’s new iPhones as merely catching up to Android.
  • Alibaba poised to surge on the NYSE
      NEW YORK – Chinese e-commerce powerhouse Alibaba will say “open sesame” to the New York Stock Exchange on Friday, as its shares begin trading in a highly anticipated debut that could raise up to $25 billion.
  • 56 million at risk in data theft
    NEW YORK – Home Depot said 56 million debit and credit cards are estimated to have been breached in a data theft between April and September at its stores in the U.S. and Canada.
Advertisement
Associated Press photos
More than two years after its original bid, Hertz agreed to buy Dollar Thrifty Automotive Group Inc. for $2.3 billion, giving it a leg up against competition from an increasing number of smaller competitors.

Hertz gobbles up Dollar Thrifty

$2.3 billion deal narrows the field, eases price hikes

The Hertz deal is expected to change little initially at Dollar Thrifty and Hertz. In the long run, prices will likely rise as the companies streamline operations.

– Hertz is one-step closer to its long-awaited prize.

More than two years after its original bid, Hertz agreed Sunday to buy Dollar Thrifty Automotive Group Inc. for about $2.3 billion, giving it more ways to attract travelers and expand its international presence. It will also give the company a leg up against competition from an increasing number of smaller competitors.

At $87.50 a share, the deal is worth far more than any of Hertz’s previous bids and about 8 percent higher than Dollar Thrifty’s closing price Friday.

Nothing will change immediately for consumers. Travelers that rent through Dollar Thrifty will still visit that counter for service. In the long run, prices in many markets will almost certainly rise as the two companies streamline their operations.

Both rental companies have grown stronger and more valuable in the years since they first considered teaming up. Both stocks have almost doubled in value, and they’ve reported robust quarterly financial results as the volume of car rentals soared. But still-fierce competition has prevented price increases, which has dragged on revenue. Fewer big competitors mean a better chance of higher rates.

The push-and-pull between two of the nation’s largest car rental companies started in 2010. Avis Budget Group was also in the mix, pursuing a bid for Dollar Thrifty for more than a year.

Avis dropped its bid nearly a year ago citing market conditions. Then, in October of last year, Hertz dropped its bid, too. But Dollar Thrifty didn’t trust that the years of attempts were over.

In February, it extended its shareholder rights plan known as a “poison pill” – a maneuver designed to deter any unsolicited attempts to take over the company – through May 2013.

More recently, it appeared Dollar Thrifty was open to another bid. Earlier this month, it urged for either a “compelling offer” or an end to the “constant distraction of merger speculation.”

Hertz shares gained $1.06, or 8 percent, to close at $14.21 Monday.

Dollar Thrifty shares rose $6.08, or 7.5 percent, to $87.08.

Advertisement